Suppose an investor has $10,000 funds in the margin account. The initial margin is 60% and the maintenance margin is 25%. Suppose the investor uses the maximum leverage to buy a stock at $4/share. What is the lowest price (critical price) before a call for action is made?

Answer rating: 100% (QA)

First we need to determine the number of shares the investor can buy with maximum leverage Given the ... View the full answer